Considering Oregon’s climate change goals alongside projected population growth and subsequent growth in energy demand, the Design Team should identify possible scenarios (including conservation and supply-side energy efficiency investment) that can align these two factors and other recent changes to the regional resource mix, such as the loss of low carbon hydro contracts from the Mid-C dams.

Regarding a goal of keeping electric and natural gas rates low, the Energy Efficiency and Demand Management design team will look at new forms of consumer-facing rate innovations; the Resource Mix design team should, however, help identify key cost and rate uncertainty factors (from BETC changes to national gas market disruptions or technology innovations) that could threaten the goal of keeping rates low.

In considering resource mix, a reasonable starting point for consumer-owned utilities may be the Northwest Power and Conservation Council’s Sixth Power Plan. However, for investor-owned utilities, the more robust discussion is found in their individual integrated resource plans filed every two years with the Public Utility Commission. Each utility is different and basing recommendations on averages and high-level assumptions can lead to erroneous results. Cost-effective energy efficiency is the first resource of choice for meeting demand for investor-owned utilities and should play an important role for the state’s public utilities as well. With the exception of supply-side energy efficiency investments, energy efficiency will be addressed by the Energy Efficiency and Demand Management Design Team. Further guidance will be found from SB 1149 that resulted in the creation of the Energy Trust of Oregon, and SB 838, which fostered the RPS.

In addition to efficiency and demand-side management measures, significant expansion of the supply of cost-effective renewable resources will be necessary in order to achieve Oregon’s goals and meet demand growth. These resources will be geographically distributed and include additional large scale wind development, ocean energy sources, solar PV, geothermal electricity, biomass and small-scale hydro.

Integrating these resources will likely include an emphasis on research and development, changes and improvements to transmission and scheduling infrastructure, and consideration of natural gas power plants both as a tool for integrating intermittent renewables and as a bridge fuel to meet remaining base load to meet remaining needs that cannot be met by renewable options while cautiously avoiding long-term investments into conventional base load natural gas plants that will make it harder to transition away from fossil fuels.

Oregon is taking a historic step to close its only coal-fired power plant in Boardman no later than 2020. But the steps taken to replace that energy will be key for determining Oregon’s energy future. How can the majority of that power generated by the Boardman coal plant be replaced by supply side energy efficiency? What are the best options for replacing the energy with renewables with the least impact on Oregon’s environment?

With respect to increasing the RPS targets, the plan should address the integration and reliability issues associated with integrating large amounts of intermittent wind and solar into the grid reliably.

The team, along with the other Design Teams, should also consider how energy-related policies will impact the economy and improve health, with particular focus on accelerating job growth in Oregon and reducing health costs to the state

State policies should point towards a more fully integrated energy system. The Global Warming Commission, in its 2020 Roadmap, paints a picture of an energy system that is decentralized, dynamic and integrated. The Roadmap describes a future where idle electric vehicles can feed energy back to the grid, where renewable natural gas from waste water treatment plants is used for refueling vehicles and serving homes, and industrial waste heat is meeting the needs of other customers through a district system. The State’s 10-Year Plan should build towards this future through modifications in the state’s regulatory structure and appropriate incentives that guide the way towards this vision.

Recognizing that significant work has been completed by the Oregon Department of Energy, the Investor Owned Utilities and the OPUC, the Northwest Power and Conservation Council, the Global Warming Commission and others, please address the following issues:

Targets for Resource Mix

Please identify achievable energy supply mixes that would meet (or exceed) Oregon’s climate change goals and RPS. This should address both the role of utility scale projects and distributed generation. The first focus should be the renewable energy resources necessary to meet Oregon’s future needs (or needs in displacing carbon-intensive resources), while addressing the intermittent nature of some technologies. Besides renewable generation, an integrated supply system for the future should avoid waste by supporting Combined Heat and Power (CHP) applications where waste heat can be readily used. The state should have targets for CHP and a program to adequately incent these projects.

The Supply team should also take into consideration the increasing energy demand created as personal vehicles and heavy duty trucks migrate away from conventional fuels to alternative energy sources (including electricity, natural gas and propane).

Incentives for Achieving Resource Mix

With the uncertainty of Oregon’s current incentives for development of generation facilities, what should the next generation of incentives look like to help achieve the desired resource mix? How do incentive programs align with mandates, such as the RPS? What role does a feed-in-tariff play?

Research and Development; Economic Development

In reaching the standards discussed above, what kind of support for R&D and economic development can help maximize economic activity in Oregon? How can Oregon further develop an advanced manufacturing industry for renewable energy generation technologies?

Mandates

Please examine the current state mandates and identify any areas for change. This should include an examination of whether to include conservation and energy efficiency investments as a supply option under a next generation of the RPS. Please examine the current state mandates, including the RES standards, the HB 3039 solar mandate, and Feed-in Tariff in relation to achieving Oregon’s greenhouse gas reduction goals, maintaining reasonable electric rates and providing business development opportunities for electric and gas customers, renewable developers and communities. Identify any areas for change. What risks are there in including energy efficiency as a supply-side option under the renewable energy standard and what are the difficulties that other states that do include EE in their RES have experienced? What is the purpose for the renewable energy standard and is it still limited to the original three purposes of fuel diversity, economic development and environmental benefits? Also, the group should consider the relationship of federal mandates, such as the mandated power purchase from qualifying facilities under PURPA. Current state policies/practices often do not recognize these resources as “renewable” or recognize their greenhouse gas content.

Supply-Side Energy Efficiency Investments

Address the barriers to implementing supply-side energy efficient investments, including regulatory disincentives, the need for outside assistance, lack of verification protocols to prove savings, and organizational challenges within utilities.